Don’t underestimate ASEM

One of the less-noticed initiatives in the world is the Asia-Europe Meeting (ASEM), designed to foster closer cooperation between the old economic giants of Europe and the new economic powers of Asia — the two diverse but culturally rich continents that together represent half of the world’s GDP and about 60 percent of the global population and international trade.

Heads of state or government from 46 Asian and European countries will gather in Brussels in early October for the eighth ASEM summit to discuss key international challenges and ways to strengthen political, economic and cultural ties between the two continents. They will include leaders from Russia, Australia and New Zealand, which are set to shortly join the ASEM initiative.

As a runup to the summit meeting, the ASEM Public Conference on Europe-Asia Inter-Regional Relations, held in Brussels from July 12 and 13, examined the regional institutional architectures in Asia and Europe, security concerns in both continents, global economic and financial challenges and prospects for building closer Asian-European collaborations.

ASEM has the potential to play an important role on the world stage. Indeed, Europe has developed an important stake in Asia’s continued economic growth and peace: Its trade with Asia totaled 750 billion euro in 2009. European foreign direct investment in Asia is estimated at 350 billion euro, with some 40 billion euro invested in 2008 alone.

In addition, according to analyst Dr. Fraser Cameron, the European Union, as an institution, expends 800 million euro on development assistance in Asia — a figure that rises to over 3 billion euro when bilateral development aid from the EU member-states in included.

At the last ASEM summit meeting in Beijing in 2008, discussions began on reforming international institutions, whose structure has remained static since the 1940s even though the world has changed fundamentally. In response to the growing Asian pressure, the World Bank agreed three months ago on a 3.13 percent shift in voting power to give emerging and developing nations greater influence.

Reaching a deal on such a change, however modest, became a test case in Asia-Europe relations because the European economies were reluctant to give up some of their voting shares, especially as the United States was intent on holding on to its veto power. The biggest beneficiary of this reform is China, whose voting power at the World Bank now ranks third behind the U.S and Japan.

Group of 20 leaders last month pledged to push for a similar agreement in the International Monetary Fund to transfer up to 5 percent of the voting power to emerging economic powers by the next G20 summit in Seoul in early November.

Some 14 years after its establishment, ASEM remains an ambitious initiative. It is difficult to lump Europe and Asia together, especially at a time when Asia has become the world’s largest creditor and the main economic locomotive and Europe’s financial crisis has turned its focus inward. Asia has done a much better job than Europe and the U.S. in coping with the international financial crisis. The EU entered the 21st century on a confident note after introducing the euro and then expanding to become a 27-nation institution. But in more recent years, discord over institutional changes and the impact of the financial crisis have stalled its momentum.

Still, Asia’s rise is often exaggerated, just as there tends to be an unnecessarily gloomy view about Europe, as if it were under irreversible decline.

Asia’s rise has been looked at from a single index: GDP growth. But the concept of development is not one-dimensional. It is broad-based and comprises multiple indexes, including low-income disparity, respect for human rights and the rule of law, robust civil society, social equity, public transparency and accountability, gender equality, environmental protection, and secularism.

When such broader benchmarks are considered, Europe emerges as an example for Asia to emulate. That is underlined by the UNDP’s annual Human Development Reports, which show disparities in Asia are growing, along with environmental degradation. Such trends hold ominous implications for intrastate stability in Asia.

As far as larger security is concerned, there is a clear overlap between European and Asian interests. That is best symbolized by the Afpak belt, with NATO spearheading the Afghan war, in which forces of a number of European countries are involved. It is also symbolized by the presence of European and Asian navies in the western rim of the Indian Ocean to combat ocean piracy, especially off the coast of Somalia.

With 21 EU member-states in NATO, the military involvement of European countries in the Afghan war shows how Asian security issues can impinge on European interests.

Both Europe and Asia actually face important security challenges. For Europe, defining the relationship with NATO, including the scope for closer cooperation, is important for further developing the EU’s Common Security and Defense Policy (CSDP), formerly known as the European Security and Defense Policy.

Compared to Europe, Asia’s security challenges are far more pressing. Asia has not only the world’s fastest-growing economies, but also the world’s fastest- rising military expenditures, the most dangerous hot spots and the fiercest resource competition, both for energy and for water.

Asia may be coming together economically, as reflected in the plethora of free trade agreements in the region. But it is not coming together politically. If anything, it is becoming more divided.

To compound matters, there is neither any security architecture in Asia nor a structural framework for regional security. The regional consultation mechanisms remain weak, even though Asia needs to cope with entrenched territorial disputes, sharpening competition over scarce resources, maritime-security threats, expanding national military capabilities, increasingly fervent nationalism and the rise of religious extremism. Differences persist over whether a security architecture should extend across Asia or just be confined to an ill-defined regional construct, East Asia. China favors the latter, and the U.S., Japan, India and several other Asian states the former.

For its part, Europe has made slow progress in strengthening its security architecture or giving concrete shape to the CSDP. But the Asian challenges raise an important question: Is Asia going to be an arena of old-style, balance-of-power politics and thus crimp its ability to shape the new global order? Or will growing cooperation and economic interdependence, as well as prospects of shared prosperity and stability, propel Asian states to act as “responsible stakeholders” in the international system and help reform global institutions?

Brahma Chellaney is professor of strategic studies at the privately funded Center for Policy Research in New Delhi.